Thousands of small-business owners rely on the Las Vegas Chamber of Commerce for health insurance, but a change in the plan aimed to better serve younger people has some longtime customers ready to bail.
Member Wayne Bernath, 60, who has chamber coverage for he and his wife, Peggy, suffered sticker shock when he recently learned his cost of $600 per month would go to almost $1,200.
“They practically doubled the monthly rate, and that’s unaffordable,” he said.
Bernath, owner of Way Entertainment, isn’t renewing his Las Vegas Chamber health insurance. But, he’s having trouble getting another plan because he has a heart pacemaker and takes blood thinners. Insurance companies reject him because of that pre-existing condition.
Now, he plans to take a big risk by going into the federally mandated Pre-Existing Condition Insurance Plan, a temporary high-risk health insurance pool created by the Patient Protection and Affordable Care Act.
The risk: To qualify, Bernath has to go without insurance for six months.
“It’s real risky. You’ve got to live carefully,” Bernath notes. “It’s sad. I’m willing to pay a fair rate.”
For 26 years, the Las Vegas Chamber of Commerce has offered health insurance and term life insurance plans to members with no changes in its rate structure.
But now the business association wants to reach out to younger business people and has adjusted rates to lower costs for those aged 20 to 39.
William Wright, president of Chamber Insurance & Benefits, a wholly owned subsidiary of the chamber, said the chamber wasn’t able to attract a portion of its younger membership because its rates weren’t competitive in the marketplace. Now the chamber uses a group’s industry, ages and genders to determine rates. People who are exposed to infectious disease, for example, will pay a higher amount than someone working in an office.
“It gave us some additional rating factors to get a more realistic rate for who people are and what people do,” Wright said. “It did create some rate increases, but it also created some enormous rate decreases. We have one group that renewed and is saving 57 percent.”
Of the total group insured through the chamber, 37 percent had rate decreases, 30 percent stayed flat and 33 percent experienced rate increases.
The changes have drawn the attention of a state official.
“We are aware of these rate changes and have asked for more information in order to re-evaluate them. While the overall request was minimal and within our standards, some individual cases merit more review,” said Jake Sunderland, spokesman for the Nevada Division of Insurance.
Chamber Insurance’s plans are offered through Health Plan of Nevada. Of the roughly 6,000 Las Vegas Chamber members, about 2,700 employers, representing 17,000 employees, take advantage of the health plan, which is for businesses that have between two and 50 employees.
The rate structure change created 10 different plans, which will have higher deductibles, or persons might pay more per prescription or pay higher co-pays while reducing monthly premiums.
“We’ve seen a lot of groups who’ve gotten a rate increase of 20, 30, 40 percent, but because they’ve used other options, they’ve taken it down to where they’re actually paying less than what they paid last year,” Wright said.
Since the new plans rolled out in April, Wright hasn’t seen a large participant drop-off. In fact, Wright said he’s seen a larger renewal rate, 2 percent higher, than two years ago. As of July 1, 27 new accounts are slated to come online and more than 100 new ones are in underwriting.
Contact reporter Laura Carroll at lcarroll@review
journal.com or 702-380-4588.